Saving Money – An important lesson for children

Do you have children? Do you ever teach them the lessons of saving money? Having two young boys, the oldest five and the youngest one, I think about this topic on a daily basis. My wife and I have started teaching our oldest son some lessons about saving money and the importance of being financially independent. While each of these lessons are minor and may seem insignificant, I believe that overall they will help to shape his values as he grows older. I am a firm believer that our schools in this country don’t do enough to teach our children about money. We may force mathematics and science on them, but we miss out on providing them real-life lessons in personal money management. It is not until they get into college that they start to realize the real world can be very tough.

I believe that parents must provide their children with the knowledge of saving money, living on a budget, and the value of a dollar. It is these simple lessons in life that will prepare them for the future and allow them to become independent. I have put together a list of 3 things that we will be doing to teach our children the value of money and the importance of saving money.

1. Family Bank – Our oldest son is at the age where we are going to start to give him an allowance for helping out around the house. We will be setting up a family bank (as I like to call it) where we will pay him his allowance every week. He then will have the opportunity to deposit that money back to my wife and I that will earn him some interest along the way. For example, if we gave him $1.00 per week, he could have the option of keeping that dollar and buying a new match box car or some candy with it every week. We would also give him the option to give us back that dollar and each week to earn .25 cents in interest. After 4 weeks, he would have $2.00 instead of $1.00 which could buy him 2 new match box cars instead of 1! I know that is a nice interest rate, but we want to keep it simple.
2. Want & Need List- I actually got this idea from a co-worker of mine. Every year for Christmas, she tells her children to create 2 lists for their wishes. The first list is their WANT list. This list should only include things that they want and don’t need. For example, our oldest son wants a new trampoline for Christmas this year. He does not need one at all, but is something he thinks would be fun. The second list is their NEED list. This list should include items that the children really do need. For example, our son may need a new winter coat because his coat from last year is too small. He needs this coat to stay warm when playing outside. I think this is a very powerful teaching tool to use with your children. Once they have the two lists created, they should prioritize their wants. That way you can teach them not to expect to get everything they want in life and to make choices.
3. Volunteer – I plan on taking my oldest son with me to start volunteering. He may be a little young still, but I think it is very important to have him see people who are less fortunate than him. I have thought about working at a soup kitchen or helping out some children who don’t have a nice warm bed to sleep in and there biggest concern is what they will be eating that day. I hope that these types of activities will teach my son that there is much more to life than the next hottest toy or having another toy truck. I am a firm believer in learning life’s lessons from real-life examples.

These are not the only lessons or ways we plan on educating our children to learn about personal finance, but are some that we are starting to work on right now. As I mentioned earlier, I believe it is a parents responsibility to guide their children through there early years. While schools are very important and necessary, I think a child learns life’s true lessons from home. Being book smart and educated is important, but being able to apply those smarts in the real-world is the biggest lesson of all.

How do you teach your children about finances?

Tagged as: Children, saving money